Bush Buffeted In Budget Battle

President Bush stressed his commitment to fiscal restraint Saturday and gently urged congressional Republicans to line up behind his election-year agenda.

The speech at a Philadelphia retreat for GOP lawmakers clearly sought to quell worries from within his party over federal spending growth, pre-Iraq war intelligence and other issues.

"One clear signal we need to send to the American people and the markets is, `We're going to be wise when it comes to the expenditure of the people's money,"' Mr. Bush said. "And we submitted a budget that says just that."

The president was heartily cheered as he entered the downtown hotel ballroom and was applauded a dozen times, including chants of "Four more years," in a 15-minute talk.

He came to Philadelphia with many conservatives angry about what they see as the Bush administration's penchant for excessive spending and growth of government, exacerbated by a new cost estimate for recently passed Medicare legislation.

The administration's 10-year expense for the health program overhaul is $534 billion, about one-third more than the projection the White House used — and which Bush insisted was the upper limit during the difficult process of pushing the measure through Congress.

Mr. Bush is due to submit to Congress on Monday his $2.3 trillion-plus spending request for the budget year that begins in October.

Officials revealed new details including more money to fight AIDS in poor countries, and a sparse 0.5 percent increase for non-defense, non-domestic security programs as part of his effort to halve record deficits by 2009.

As a result, Mr. Bush spent much of his address emphasizing that he is committed to spending discipline and asking lawmakers to join him. That segment of his speech was the only one not peppered with applause.

"You spend, I propose — together we're responsible," he said.

The election year will be "a challenging year for making sure we spend the people's money wisely," Mr. Bush said, and he even singled out health care costs as an area that particularly needs discipline.

Perhaps reflecting the president's need to do some courting of Republicans, the speech was mostly light on policy and heavy on buttering-up. He was generous with praise, thanking them as a group three times, and spoke often about looking forward to working with them.

Though Mr. Bush said his 2005 budget will balance national security, social needs and fiscal responsibility, Democrats said Saturday his policies have wounded the economy and prompted sky-high federal deficits.

The New York Times reports in a story prepared for its Sunday editions that the spending blueprint the president will propose backs away from some of the major spending and tax initiatives he supported in prior years.

Constrained by big budget deficits and political realities, administration officials told the Times they would retreat on some of their own ideas and oppose others favored by Republicans in Congress.

Mr. Bush will try instead to lock in some of his prior victories, the newspaper says, by pressing Congress for a permanent extension of most of the tax cuts adopted in the last three years that were set to expire over the next seven years. He says the tax cuts foster economic growth, which helps create jobs. But many Democrats say the tax cuts are fiscally reckless and widen the gap between rich and poor.

The Times points out that, in getting his budget through Congress, the president will face formidable challenges from Senate Democrats who oppose making his tax cuts permanent, from conservative Republicans who want to cut spending more and from lawmakers in both parties who shudder at the prospect of reducing spending on favored domestic programs in an election year.

"We had a very hard time passing a budget resolution last year," a senior Republican Senate aide said to the Times. "Things are no better this year - they're worse."

Mr. Bush said Saturday in his weekly radio address, "We will devote the resources necessary to win the war on terror and protect our homeland. We'll provide compassionate help to seniors, to school children, and to Americans in need of job training. And we will be responsible with the people's money by cutting the deficit in half over five years."

Mr. Bush said he will propose a 3.5 percent pay increase for the military, and an 11 percent boost in the FBI's budget, including $357 million more for counterterrorism.

But Democrats scoffed. They were more interested in calling attention to the plan's red ink, which administration and congressional officials would total $521 billion for this year - easily surpassing the record $375 billion set last year.

Rep. Brad Miller, D-N.C., delivering the Democrats' radio response Saturday, challenged Bush's claims that the economy has rebounded from recession.

"If President Bush thinks these are good times, I wish he'd been with me when I visited the unemployment office in Rockingham County, N.C.," Miller said. "The parking lot was full. I had to drive around the block and finally parked on the grass."

Miller also said that while Democrats support cutting waste from the budget, "Last year President Bush thought health care for veterans was wasteful spending and he put funding for education in that category, too."